It took Amazon nine years to raise the fee for its Prime premium membership. It wont take nearly as long for the next price hike to show up.
Doshi said those services could add the right value for customers, but it wont be the actual selling point for Amazon when it raises its prices again. It will need to stick to its message of increased transportation costs because its a reason customers can stomach, he said. If Amazon, for instance, says its adding $ to your fee because its adding music-streaming, customers could easily say they dont want it then.
And were not done...We plan to continue to add more and more value to an Amazon Prime membership over time, Law said. This includes adding more products eligible for the free two-day shipping, and a improved shipping process.
An Amazon fulfillment center.
Thats where Amazon will have to deliver. Shipping is still the most sought after benefit, but the company is expected to roll out a music streaming service, or possibly a gaming service, soon. Amazon has been in talks with music industry executives for some time now and music-streaming would help them get in line with competitors like Apple and Google. After it acquired game developer DoubleHelix, a company thats known for a free-to-play console game, there was renewed speculation in the development of an Amazon gaming console.
As long as they can continue to add value to Prime, just from a psychological standpoint, $ doesnt seem too bad, Doshi said. I think once they start moving into triple digits, people will start to consider the number of services...if Amazon had increased it to $, it would force a lot of people to think about Prime and how much value youre getting out of it.
At the end of the day, [CEO] Jeff Bezos wants to do whats best for the cuAmazons Prime fee hike Is this just the beginning? Psychologystomer and if they increase this every year, it becomes challenging for consumers to ultimately recognize the value from Prime, Doshi said. But if they do it every few years and basically attribute it to rising transportation costs, then it becomes a little more palatable for consumers to swallow.
While Amazon will likely have everything in place when it asks for its next fee increase, there will be another challenge to ce: convincing customers any service is worth more than $. Keep in mind, the company had also considered a $ increase to $.
Amazon has been rapidly adding more fulfillment centers across the country to ensure shipping can be as st as promised. A previous report suggested that Amazon could be building its own delivery fleet in order to avoid relying on shipping partners. (Sorry, still no drones yet).
Consumers may need to get ready for rate increases every few years as Amazon races to add services and programming to justify the hikes.
Amazons $ increase in its fee sets a precedent for the company to raise its fees in the future,天罰之音聯盟 with the company having laid out the argument that it is cing rising fuel and transportation costs. It wont come without benefits, as Amazon races to add services and other perks to justify the increases. And the company will likely tread cautiously, sensitive to upsetting its most loyal of customers. But ultimately, those rate hikes will come, and likely at a much ster rate than before.
Amazon could see price hikes every three to five years, although its hard to pin down the exact window for increases, according to Neil Doshi, an analyst at CRT Capital Group. He doesnt believe theyll come every year.
Correction, : p.m. PT: This story initially misstated the new price of the Amazon Prime fee. It will be $ a year. Also, a quote from Neil Doshi has been corrected to read As long as they can continue to add value to Prime, just from a psychological standpoint, $ doesnt seem too bad.
Amazon will also have to deliver on video content. Its been big s on original programing to challenge Netflix for its video-streaming crown, and the initial results show it may be paying off. The company said previously that millions of its Prime memberships in the last half of were a result of customers who signed up for the video service primarily, but then used Prime shipping out of convenience.
At $ a year for full membership (students get a discounted rate of $), the monthly fee is roughly $. a month. People who consistently use all the various services, or heavily rely on the two-day shipping, will probably say its still a great deal. But others may take some convincing.
Amazons official reasoning for increasing the price has been transportation costs, but the company has been quick to point out that the service has grown way beyond its initial free two-day shipping selection of million products.
When asked about future fee increases, Amazon spokeswoman Julie Law said the company had no news to share, but promised more benefits were on their way. The Prime subscription currently features million Prime-eligible products, unlimited Prime Instant Video streaming, e-books through the Kindle Owners Lending Library and free Sunday shipping.
Donna TamDonna Tam covers Amazon and other fun stuff for CNET News. She is a San Francisco native who enjoys feasting, merry, checking her Gmail and reading her Kindle.
You probably updated to iOS . but rumors point to new maps, iTunes Radio and more in iOS . The Apple TV could bring motion controls and our Steve Jobs figure winners!